1:01 pm, October 25, 2022
Stability must be top of new PM Rishi Sunak’s economic to-do list, the boss of Vertu Motors has said.
Appearing on this morning’s Today programme on BBC Radio 4, Robert Forrester said: ‘Business needs an environment in which it can invest, and for that it needs stability.’
He added that key areas to focus on to achieve it were inflation – currently at its highest level for 40 years – being brought under control and predictable interest rates that didn’t spike.
With new data showing UK economic activity shrinking at its fastest pace in nearly two years, he added: ‘We need the adults back in the room, to be brutally honest, and of all the people on the pitch, Mr Sunak has a good track record in dealing with difficult decisions.’
There had been chaos, he said, with interest rates being charged to customers on finance going up considerably – for new cars it can be up to 9.9 per cent, said Forrester, adding that he’d seen a competitor at 13.9 per cent for used cars.
Asked for his thoughts for the UK over the next 10 to 15 years, Forrester was played an excerpt from a Today interview yesterday with private equity business Terra Firma founder Guy Hands, who forecast ‘steadily increasing taxes, steadily reducing benefits and social services, higher interest rates and eventually the need for a bail-out from the IMF [International Monetary Fund] like we were in the 1970s’ unless the government renegotiated Brexit.
However, Forrester disagreed, saying: ‘We’re dealing with global issues here. Inflation in the Netherlands, for example, is considerably higher than [in] the UK and Brexit is a settled issue as far as the British public are concerned.’
He was about to continue but the interviewer challenged him by asking to what extent it was settled, saying there were still many businesses worried about trade relations with the EU.
Forrester replied, saying: ‘We sell a lot of cars that are imported from the European Union and the issue that we face isn’t Brexit, it’s actually global commodity supply issues reducing the amount of cars that can be produced.’
He repeated that what was needed was stability.
‘We need a government that is going to actually calm down, forget big revolutionary changes and actually get back to some stability in what is a very difficult global climate.’
And he said he couldn’t see Brexit being in Sunak’s top five policy issues other than the Northern Ireland Protocol.
Kathleen Brooks, founder of financial analysis consultancy Minerva Analysis, who was brought into the interview, said there had been a sharp drop in the cost of government borrowing since Sunak was announced as the new PM.
She admitted that didn’t feed through to consumer borrowing but said it had restored 10-year gilt yield levels to the level they were just before the ‘fateful’ mini-Budget, saying that meant the UK had become more creditworthy if anything over the past 24 hours.
Asked what kind of a difference a third of a percentage point would make to him on interest rates, Forrester replied: ‘It makes a massive difference in confidence and sentiments.’
Listen to the full interview at the top of this story.
